# Questions tagged [microeconomics]

Microeconomics is a branch of economics that studies the market behavior of individual actors (usually firms and consumers) and the aggregation of their actions in different institutional frameworks (usually the market).

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### How, with complete markets, do we have a representative agent?

I've read several texts stating that with a complete market assumption, there's always a representative agent lurking. How is it that by assuming complete markets, we're able to prove the existence of ...
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### Multidimensional screening and convexity of the surplus/rent function

I'm starting to read the literature of multidimensional screening models for monopolists selling $n$ goods to a continuum of buyers with $m=n$ dimensional types, and Rochet (1987) proves that a ...
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### Is there a class of demand functions that deliver equal surplus to consumers and a monopolist?

Consider a market with a monopolist firm that has zero marginal cost and faces demand $D(p;\mathbf{a})$, where $\mathbf{a}$ is a vector of parameters and $p$ is the price. The monopolist maximizes ...
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### Are there multiple equilibria in the second price auction?

Suppose that $n\geq 2$ bidders compete in a second price auction. Each bidder $i$ knows their own valuation $v_i$, but only knows the distribution generating the valuations of the other players. ...
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### Bertrand game - Nash equilibrium

The quantity is limited to 300 but the monopoly quantity is equal to 400 and gives a monopoly price of 600. But if we plug the quantity of 300 into the demand function we get a price of 700.But I am ...
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### Cournot Competition game with 3 Firms

Three firms are in Cournot competition. The inverse demand curve is denoted p(q) where p is the price if a total of q units are produced. Assumptions are: p(0)>0 and p'(q)<0 and p''(q) $\le 0$ ...
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### Paternalistic Government policies

A consumer with income $m$ has preferences $U(x , y) = x^a y^{1-a}$ where a is between 0 and 1. A paternalistic Government wants to regulate the choices of the consumer to maximize it's own welfare ...
First: Given this definition of the Independence Axiom, If for all $P$, $P'$, $P''$ in the set of lotteries over outcome space $X$, when: $P$ preferred to $P'$ $\implies$ $aP + (1-a)P''$ ...